How can we expect a cigarette tax to pay for Philly schools, when we also expect it to discourage smokers?

The eternally burning question: How do we find the money to keep Philly’s collapsing schools running after the Corbett administration’s budget cuts? The most recent answer: Let’s add a Philly-only cigarette tax and use that new money.

If only it were that easy.

After more than a year of debate, a $2-per-pack tax on cigarettes passed the House this spring, passed the Senate (twice) and has received verbal support from Gov. Tom Corbett. All this is vital; local governments can only raise such taxes if they have the state’s support.

Things seemed swell until Mon., July 7, when the GOP majority decided to amend the bill, again, to put a five-year time limit on the tax. That idea passed with the help of five Philly-area lawmakers—which means, in true Keystone Kops fashion, the bill now has to go back to the House for final approval before it can then reach Corbett’s desk.

Problem: Now the House has taken off for summer break. While they’ve scheduled a single special session for Aug. 4, when they’ll likely consider this legislation, that doesn’t mean it’s a done deal.

Mayor Nutter has said that not implementing the cigarette tax could cost Philly schools 1,300 jobs, including teachers, nurses and counselors. To be precise: Delaying the tax’s implementation beyond the projected Sept. 1 start date will cost schools about $1.6 million per week. Not implementing it at all would put the opening of Philly’s schools for the 2014-2015 year at risk. The tax, it would seem, is an absolute have-to.

But here’s the thing: A cigarette tax will still not be enough to save our schools. Not by a long shot.

To understand why, we only need to look at the Philadelphia Health Department’s own numbers and motivations.

Philadelphia has one of the highest rates of adult smoking and obesity in the U.S., according to a 2014 Community Health Assessment study. That’s bad. But the past 10 years have seen a 15 percent reduction in adult smoking. The government claims its educational and advertorial efforts deserve the credit for that.

Today, just 23.3 percent of Philadelphians smoke. This is higher than the 18 percent national average, but actually the smallest percentage the state has seen since smoking data has been tallied. The declining rate is a nationwide trend that’s has seen massive victories over the last decade, the most obvious of which are indoor (and some outdoor) smoking bans.

To put those numbers into some perspective for the sake of the tax, 23.3 percent of butt-sucking Philadelphians comes out to about 281,548 total smokers, if you’re to use the 2013 Philadelphia county census estimate (1,553,165), and the percentage of adults over 18 (77.8).

Rough estimates say the average U.S. smoker smokes 13 to 16 cigarettes per day—less than a pack, which holds 20 cigarettes. So, the average smoker is buying between four and six packs per week.

For the sake of argument, let’s say Philadelphia’s smokers buy five packs per week. That means, if the bill passed, each of Philly’s 281,548 smokers would be shelling out an extra $520 per year to get their fix.

Total new yearly tax revenue: $146,404,960.

Problem solved? Nope. And not just because schools superintendent William Hite has noted it would actually take $216 million to continue the district’s already-insufficient, broken funding levels. Or because Philadelphia officials estimate revenue will be about half of my estimate when all is said and done. Or because the new revenue would be scheduled to cease after 2018.

Rather, it’s because when taxes are put on cigarettes, they do their job really well. Before this current debate began on using cigarette (or soda) tax funds for schools, big cities proposed such taxes because, they said, it was good for us—because it would discourage those purchases. Tax vices, they say, and there will be less vice. And for once, they are actually correct.

When a $2-per-pack tax was debated in the Pennsylvania state legislature last year, Dr. Mark Stehr, a professor of business at Drexel University, conducted a study that concluded an increase would lead to 8,000 fewer smokers in the city. Over the long term, that could add up—which may be where the official yearly estimate of $83 million comes from—and, indeed, local smokers are already taking note of this new potential tax on the horizon.

“I’d stop smoking,” says a SEPTA transit worker who declined to give her name, on a smoke break in Center City. “I’m not paying more.”

A colleague, also on a smoke break, agrees. “That’s why I quit smoking in New York,” he adds with a laugh.

He means New York City, where a state excise tax of $4.35 per pack of cigarettes is supplemented by a $1.50 city excise tax, adding a total of $5.85 to each pack of cigarette sold in the Big Apple. In much of the city, packs are about $15, and the most recent data show the percentage of smokers at 14 percent.

Of 15 random smokers approached for this story, those two were the only ones who outright declared they’d quit entirely rather than paying more. But everyone interviewed had a plan to handle the increased expense.

“I’ve already switched brands,” says one woman, on break near 15th and Market in Center City. “I was smoking Marlboros, now I’m buying American Gold [which is regularly cheaper].” A smoker for some 30 years, she said, the upcoming tax may be thing that finally drives her to quit. But she can’t say for sure.

No one I spoke to said they’d be willing to travel out of the city to buy their cigarettes. And only one smoker, Biranne Gallagher, 24, an office administrator, said it’d have no effect whatsoever. “I like smoking,” she said. “I enjoy it, and I’m addicted to it.” She’ll pay the $2.

But keep in mind: This is just the tax we’re talking about. It’d exist right there alongside a massive, ongoing, nationwide anti-smoking education campaign; a well-organized city public health apparatus; a young, national universal healthcare system that discourages smoking; the Smoke Free Philly campaign; an already naturally declining smoking population and the new market competition of electronic and vapor cigarettes, which are not part of the Philly tax. All of that means one thing: Whether the tax is “temporary” or not—it’s only temporary.

Plus, the Philly government is heading to find itself in the odd situation of using tax dollars to discourage smoking, while relying on smokers to fund one of its most basic human rights. Their PSAs will tell you to stop—but if you do, you’re literally taking money away from the city’s children. Talk about a mixed message.

This isn’t to say short-term revenue sources like this one aren’t needed to keep the schools running. When they’re all we have, they are.

But a regressive tax on a product on the decline—partially because of said taxes—is no a way to fund a school district. The actual, obvious answer here is a school funding formula that would make sure the state’s public school students, teachers and staff aren’t treated as political pawns each June. Pennsylvania is one of just three states in which such a formula is not law, so when the full-time legislature debates its yearly budget, education is fair game to be put on the chopping block.

Add to that the decision partially being made by politicians receiving donations from, and being lobbied by, anti-teachers’ union groups—like Americans for Prosperity, among others, who’ve discouraged increased school funding on the principle that graduation rates are low—and you end up with a school budget pieced together through reliance on, of all things, smoke. Somehow, that seems depressingly appropriate.

“Schools must not open with inadequate staff shortage like the last year especially neighborhood schools like West Philly, Bartarm, Fels, Frankford, Lincoln,Ben Franklin, Northeast, Frankford, Dobbins, Overbrook, Kensington, King, Furness, High School of the Future, South Philadelphia and so on. It will be like another Bartarm ! Hite must hire back all the laid off people to restore the safety of the staff and students. Teachers are quitting the District fearing their safety. Effective principals are leaving the District because Hite failed to give them enough human resources to run their building safely. They fear the safety of their staff and students and they fleeing from the District.”

4. Anonymous said... on Jul 18, 2014 at 03:57PM

“And with the increased tax on homeowners, where will this money go?”

5. Anonymous said... on Jul 21, 2014 at 02:57PM

“What will happen when the City smokers rush the county lines to get their fix?

When will the "Smart Thinkers" dig into the real money problems?”

6. Douglas J said... on Jul 22, 2014 at 03:59PM

“Another Tax!!!! - This is not about funding the abysmal schools, its about generating revenue for the outrageous salary & benefits of city employees and the noneffective, self-serving teachers union. If Dr. Hite had the children's true interest at heart, he'd make the first move by cutting his salary/benefits by 35%. The teachers union, rank and file by 11% and supervisory admin by 25%. Then lets see what happens.”

7. Barry The Imposter said... on Jul 23, 2014 at 12:00PM

“And how much does the Superintendent make? Didn't the taxpayers buy out that black racist Superintendent for, what, around $1 million bucks. What's the average salary for a principal in the Philadelphia public school system? How many retirees are pulling down over $100,000 a year for the rest of their pathetic lives with free healthcare?”

8. Big L said... on Aug 11, 2014 at 10:07PM

“A tax on cannabis would be better. Think about it. http://www.denverpost.com/marijuana/ci_26247743/pot-revenues-starting-help-select-schools-pricey-projects”

9. Anonymous said... on Oct 6, 2014 at 04:39PM

“The problem is that Corbett slashed school funding, so he needs to fill the shortfall. What's going to happen when smokers who don't want to quit start spending their dollars elsewhere like I do? I've lived in Philly for the last 13 years, and I've only bought cigs here a couple of times. I get my smokes either from the reservation when I'm on Long Island or from Deleware. The brass seems to forget that we here in Philly live close enough to Deleware that it makes sense to not pay the extra and instead spend it on taxes - people were already doing it. They mistakingly think that when the number of peole paying for cigs drops its because they're not smoking. This couldn't be farther from the truth. Its because people have always been spending money elsewhere. Good luck with that tax.... @WolfforPA”

10. Travis D said... on Dec 2, 2014 at 07:10PM

“Why make us suffer for ya'lls mistake or your dept. Hay why not raise a tax to get me a business or me extra money. So look at it like that for a change cause I will quit smoking an tell all y'all go fu** your selves got it! Y'all are nothing but a bunch of crooks out to get something free!”